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I was reading my parent’s TIME Magazinethis week (that I usually swipe to read on the train) and they had polled Americans on the state of the economy and their take on how they plan to personally “get by” in the coming years. You can read the survey results and the article about this concept of a social contractonline at TIME.com.

I had never heard of this concept of a “social contract” that business and government have with America. I work in a recruitment related field so if it existed, I thought I would know about it. As a human being I was aware of it as a colloquial dream we have perpetuated by the stories told by our parents and grandparents.

My family history doesn’t go back that far here in America. My great grandparents arrived from Poland and the Ukraine pre-WW1 and went to work in the gritty factories of Chicago because it was a better living and opportunity than they had back in Europe. (poor peasant potato farmers I usually say) and the economic opportunity has kept us here in Chicago ever since.

My grandparents generation went on to slightly boring but consistent blue collar jobs with pensions and my parent’s generation went on to white collar jobs after getting college educations. Some of them got a pension and health insurance and others did not. My generation doesn’t even get a shot at a pension. Companies have found that they can hire good people without it and they tell us that a 401K is really the same thing. (for reference I am 33)

So, we have these 401Ks that seem to never make money fast enough to accrue enough funds to equal what a pension would. They plummet in value every 10 years or so in recessions, and someone changes the funds available without asking or telling us. Most of us have health insurance through our jobs. We pay handsomely for it, between $100 and $300 per month per person. And then when something happens that requires medical care, the insurance only covers 1/2 the costs. It is totally possible to go bankrupt with health insurance coverage these days because most coverage is crap compared to what my family had back in the 1980’s.

TIME says that there is an “implied” social contract in America where you give a company (or number of companies) your time and energy and they give you “a basic level of economic security provided you work hard and took responsibility for your family”. (direct quote from TIME July 28, 2008 p 42) And I think things have changed. This contract implied or not doesn’t really exist anymore. I see businesses every day making decisions to give workers less and people have to get more creative trying to survive.

I think the social contract is more like this now.

1. A company promises to pay you as little as they can for your time. This sounds pessimistic but I have seen the proof on paper that you are paid what they can get you for with your experience rather than what you are worth or how much “the job” pays. You have to wait years to work your way up the ladder to make a good wage and then marketers and your neighbors taunt you daily to buy everything in sight to keep up with the Joneses. 56% of the people who made over 100K a year said even they can’t expect to afford health care, college or a secure retirement anymore. And 100K a year is a lot of clams. (I don’t make anywhere near that. ) I do realize that these businesses have to keep costs low in order to compete with India and China, but somehow I’d rather see the cuts come from other areas that don’t erode the culture in America and impede our ability to raise families.

2. Marketers will prey on you from every direction. A lot more people could make it through hard times if they had savings but the national savings rate is negative now. All the “stuff” and services you “must” have seems to replace the financial security your grandparents achieved. Just say no didn’t work for reducing drug use in the 80’s and I think that the disposable consumer culture will probably continue here too.

3. Health Issues will cost you. Most young people don’t need much care because you haven’t gotten to the age where things start falling apart yet and we don’t have any concept of how much it costs to survive a serious health issue like cancer or bypass surgery. Both my parents had heart surgery in the late 1990’s and they were 50 & 60K each. We paid about 10K each of those costs and the insurance paid the rest. I just heard someone at my dad’s workplace had bypass surgery last month and it cost $100K. I know they have really poor health insurance there, and I can guess that the guy might have had to pay 50K out of pocket. Even dental issues are expensive. I need have needed a crown for about 5 years and because there is no pain or damage being done since the root canal and filling, I am holding off on the $1,000.00 price tag since dental insurance is only going to pay 1/2 and I would rather save the $ for a real emergency like fixing the 7 year old car I have or paying for the radiator heat to be fixed in my condo.

4. Retirement is going to be difficult. Very difficult. Some people wonder if social security will be around in 2040 when I turn 65. I personally, think it will be. It may not be nearly enough though. Most of us will have some 401K savings but as the Frontline Retirement special found, most people make crucial mistakes with managing their 401K and end up loosing a lot of money and getting little out at the end. (and then have to go back to work) Some tips include, never take a lump sum benefit, due to the tax penalty, never just let it ride and not watch the performance and watch for trading and management fees eating up your money. It also helps not to own a McMansion when you retire and live within your means before retirement. Saving money (like 10% of after tax income) on the side and investing it in some low risk but higher than inflation yields is also a smart way to prepare. And well let’s hope medicare still exists in 2040 also, and that doctors and hospitals still accept it as payment.

5. Creativity & Leverage are the new working hard. Money makes more money, it’s all who you know and being clever with side jobs or side businesses usually helps. Yes, saving a large percentage of your income by living simple and investing it can help you have the “power of compounding interest” as they say. Keeping in touch with people and maintaining your network helps with job opportunities and side opportunities to make some income. Starting weekend jobs or part time businesses online or otherwise helps too. I find people living simply and leveraging clever ways to work in more than one place are the ones that will have what they need later on. Getting into an industry that is doing well in the economy also helps but that may take pro-active skill re-training. Paying off your mortgage early and not moving also helps. You loose thousands of dollars on the services and fees associated with that transaction every time you move, and we all know you pay 3x the value of your loan in interest if you really pay your mortgage over 30 years. After that you are seriously in the hole.

The only contract I think we really have now is that everything will change by the time the 30 somethings reach retirement age. The only thing we have to rely on is ourselves. In general business is struggling because the US has passed it’s peak and we will be in a pack of “also rans” soon. Companies in the US will not see the skyrocketing growth that they saw post-war in the last 60 years with China, India and Eastern Europe emerging as super-economic powers. This coupled with dwindling natural, energy and food resources will make the next 50 years a post US dominant era that will be much harder and more global.

I actually believe if the US was more competitive with skills and education we would do well in a world economy but I haven’t yet seen the expertise or drive to innovate. All I see every day is the drive to reduce expenses and cut resources in business and make short term gains with little or no thought about long term survival. I feel like the country is being run by the lowest common denominator MBAs right now and the next 10 years for us commoners are going to be difficult as a result, as we all lack the jobs/growth that they sucked/poached out in the short term and ran off with the profits.

So, enough about all that negativity.

How do you plan on coping with the changing game living and working in the US in the next 50 years?

I have been busy beyond belief with work latley and not able to really blog at all. I did want to make this quick exception to blog belatedley about Earth Day since I think this is an important topic that everyone should be taking action on and looking to find out how they can reduce consumption of energy overall.

I am happy to see that Al Gore has made earth day popular again and that it is now cool to do the right thing and save energy and scale back consumption. We are looking at oil at $117.00 a barrel or more now and gas can’t be far from $4.00 or $5.00 per gallon soon.

Some of my favorite ways to save energy (electricity and gas) are to:

1. Turn off my computer at work at night and turn off my home computer when not in use. Guess what? It’s also good that hackers and viruses aren’t allowed to access them when they are off either.
2. Coast while driving. Automatic cars are less fuel efficient because we always have our foot on the gas. Take a cue from the old manual transmissions and just coast sometimes and save some gas.
3. Do dishes when the dishwasher is really full (good for us lazy people too) and then turn off the plate warmer dryer option. Let them air dry instead.
4. The energy saving flourescent bulbs that I call squiggley bulbs are great. Don’t worry about the mercury thing, just be very careful not to breathe around a broken bulb if that happens.
5. Recycle – Duh! Cans, Bottles and plastics are finally now accepted for recycling where I live. I also end up re-using the cute shopping bags you get at stores for carrying things to work or for lunch. And I save up the plastic walgreens, target and jewel grocery bags and turn them in to recycle at Jewel.

Ok, the topic of saving electricity either for the purpose of saving money or saving the environment or both is getting more popular. I just read in TIME magazine about this new term called Vampire Electronics. They are electronics you have in your home that still suck down electricity and energy while they are not in use. Things that are in this category according to the blurb were coffee makers and cell phone chargers. I would also think that computers in sleep mode (better than being on though) DVD players, external hard drives, radios and your kitchen appliances would fit in this category too since they all have led lights, clocks or some kind of process running in the bakground at all times. Some of these things are necesities (you can’t unplug the fridge when you leave to go to work) but others are not. Unplugging the toaster, coffee maker, cell phone charger and dvd player when not in use can add up to $2-$5 bucks savings in a month by my best guess. If you have many of them (and a lot of electronics in general) you may save a lot more if you just shut down completley and unplug them.

You didn’t know there was a solar decathalon did you? Well thanks to the NY Times, I just read about it. More of these contests seem to be funding research into new emerging technologies and making the leap into the next frontier before risk averse companies get into the act. Plus a competition doesn’t have to be profitable or sell anything. So it does make sense to a point.

The event was one where universities (at least they all seem like universities) competed in a contest (judged by 10 categories hence the decathalon name) to build a 800 sq foot self sustaning off the electricity grid home. I bet you’re thinking you’d like one. I would too, but we’re a ways away from that. The top 10 designs were invited to bring their homes to Washington DC and assemble them there for all to see and for the judges to see also. Then they of course got judged and ranked and all that. But the cool thing was that the public could go see these homes and weigh in on whether or not they would buy one entirely or just parts of the home or process for their own existing home. While no polls were taken that I can find, I think the public was very accepting of the technology and if it was more affordable people would be lining up at 5 am at home depot to buy solar cells.

Anyway, the designs were innovative using the earth to heat them and the sun to power them and I would like to see more consumer products available for our homes now so that we can do a lot better with the energy use without building a new one from scratch.

Just like those squiggley light bulbs we have to use in our lights and lamps we have to change our christmas tree lighting to save electricity too. It’s just not worth the trouble of using energy that creates so much dangerous nuclear waste when we can save it and buy the same products that use less and are better for the environment. I am not a total green person but I did buy a sset of LED christmas lights last year and I liked them a lot. They’re actually brighter than the old kind and use less energy! I didn’t have to use as many strings either. So make it a green christmas in more ways than just the color of the tree. Give the new energy saving lights a try. Because christmas will be here before you know it.

I am not sure how many people still believe that climate change and global warming is not going to happen, but it has to be dwindling. People every day see the effects of smog, pollution, extreme weather, melting glaciers and ice caps and rising temperatures. I just wish we could get on to the next stage after recognizing it is here, and start making changes already! Time is running out and it is hard to justify the oil we burn and the energy we consume just because it is affordable right now. The big businesses that give us that energy would like us to think we can afford it, but really it is about a lot more than just money. It is about the earth and the survival of this planet. One thing you and everyone should do is to inform yourself about climate change and it’s causes. then stay informed of what your congressman and representatives are doing about it when they vote on bills that are related to energy policy. One place you can find videos of these speeches in the house and senate is http://video.energypolicytv.com/ They list as many as they can and they are free to everyone to view. I think that the one on solar power is particularly informative. Check them out and follow up with your local government officials and tell them how you want them to vote!

I got this in an email today and wanted to share it with all of you. I think these are some good tips. I previously blogged about saving money and spending wiser a few months ago. It is a topic I am paying more attention to since I am trying to build up some more savings so I can buy a better place in a few years.

There are many simple ways to save money around your home. And some even help you save the environment, too. Here are some of our favorites:

1. Replacing an old dryer with a new, energy-saving model equipped with a moisture sensor can save you cash, up to 15% per load (after the cost of the dryer. this is only good if you already need one)

2. Use warm or cold water instead of hot when washing your clothes.

3. Turn the thermostat on your water heater down a few degrees, and add some insulation to the tank itself, to help it retain its heat. Insulating the tank costs about $20 and can save you $25 a year.

4. When the fireplace is not in use, don’t forget to close the flue damper. Chimneys are designed to let smoke escape, which means heated or conditioned air escapes, too.

5. Use linear fluorescent and energy-efficient fluorescent compact lamps. They last many times longer than old-fashioned incandescent bulbs and use much less energy.

6. Use solar pathway lights outside your home to eliminate the use of electricity for exterior lights.

7. If purchasing a new refrigerator, consider one with the freezer on the top—they’re more efficient

8. Cut out expensive directory assistance calls by using 1-800-free-411. This new service is made possible by thousands of national and local businesses whose brief audio advertisements are played to callers who request businesses in their yellow pages category.

9. Clean inexpensively, and with common household products. For kitchen counters, add four tablespoons of baking soda to one quart of warm water. It cleans and deodorizes. Add equal parts sudsy ammonia and water for another all-around cleaner. Use vinegar (white or apple cider) mixed with water to remove soap and hard-water buildup.